OK, here's what I know...
This all started when I was talking to a local guy (goes by 'Hantra') who said that audio from a PC sounded really good... and then I started playing around with output from a headphone jack of a laptop... and I did indeed hear something special... but it was just a taste.
One thing led to another and various soundcard recipes started coming out... the geeks on Hydrogenaudio.org were proclaiming the M-audio 2496 'Audiophile' to be the best bargain at $25... and it output a bitperfect datastream... but now those guys pretty much say everything is bitperfect if it's digital... but I will try not to digress on that.
Anyway... the upper-end stuff starts coming out and people start using the analog out of the soundcards... (RME, EMU, Lynx, etc.) which is what I did. So, I have a PC with a recording-studio-grade soundcard that could output digital and analog. The idea of a USB DAC was not even a thought for me back then... That just adds a third option now...
(So, today, with this setup, I have analog out, 2 digital outputs, and USB output.)
Meanwhile, Hantra got himself this Lynx LM-22 badass soundcard that output some sweet analog. It was about a $700 card IIRC. Anyway, he found that he liked the digital out to a DAC of his choosing... and eventually I found the same but used the TacT as my DAC.
Then, along comes 2 things that are unrelated for the most part... the Squeezebox, which also plays analog or digital and the USB DAC which turns any PC into a transport and doesn't depend on the spdif output for bitperfection.
I've experimenting with the whole mix. Soundcard spdif output (coax and optical), analog outs from the soundcard, and USB output from the PC into a USB-DAC. Plus, I added in the Squeezebox as an alternative to the PC since it is functionally identical for sound reproduction.
Hope that helps explain my experience a bit more.